US Senate Committee on Health, Education, Labor, & Pensions

Harkin, 31 Senate Democrats Call to Reauthorize Critical Unemployment Insurance Program

Friday, December 06, 2013

WASHINGTON, D.C.— Today, Senator Tom Harkin (D-IA), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and 31 Senate Democrats sent a letter urging Congress to preserve federal unemployment insurance for another year. If Congress fails to act, more than 1.3 million long-term unemployed workers will lose their unemployment insurance at the end of December -- and millions more will have no benefits after their initial 26 weeks of unemployment insurance (UI) are exhausted during the course of 2014.

With just 23 days before federal UI benefits are set to expire, the Senators wrote: “We are writing to urge the continuation of federal support for unemployment insurance, a critical component of our ongoing recovery and a lifeline to millions of Americans as they search for work in this challenging economy.  As it stands now, a few days after the holiday season ends, unemployment insurance will abruptly terminate, cutting off support for 1.3 million Americans.”

The unemployment insurance system is a partnership between the federal government and state governments that provides a temporary weekly benefit to qualified workers who lose their job and are seeking work. The amount of that benefit is based in part on a worker’s past earnings.  In Iowa, the average weekly UI benefit amount is $336 and the is among 43 states that offer 26 weeks of UI coverage, while seven states offer fewer weeks.

The extended federal UI program was signed into law in June 2008 by President George W. Bush, when the national unemployment rate was 5.6 percent and the average duration of joblessness was 17.1 weeks.  It has been reauthorized by Congress a number of times since as America continues to emerge from the greatest economic recession since the Great Depression.  Today, the national unemployment rate is seven percent and the average duration of unemployment is 37.2 weeks, which is much longer than the 26 weeks of unemployment coverage that most states provide. 

According to the non-partisan Center on Budget and Policy Priorities (CBPP), the long-term unemployment rate is falling, but it's still at 2.6 percent, which is twice as high as in any prior month when extended UI benefits were allowed to expire.  CBPP economists note that in each of the previous three recessions, federal unemployment assistance didn't end until the long-term unemployment rate had dropped to around 1.3 percent.

“In Iowa and states around the country, millions of families are still looking for work, and unemployment benefits are an essential lifeline that helps them to put food on the table and pay their bills,” Harkin said. “Even as the economy recovers, there are 4 million Americans who have been out of work and looking for a new job for at least 6 months. In Iowa, 4,300 jobseekers will be cut off from unemployment insurance at the end of this year and another 31,000 will exhaust their state benefits over the course of 2014. We owe it to the millions of hardworking Americans who are still struggling to give them the support they need. By extending this aid, we can help them and the businesses and communities where these families live and shop. I urge my colleagues to move this critical measure forward to help middle class families and strengthen the economy.”   

A new study by the Council of Economic Advisers and the U.S. Department of Labor estimates that the failure to renew UI  could cost our economy 240,000 jobs in 2014, including 824 in Iowa.

Over the years, the non-partisan Congressional Budget Office (CBO) has found that preserving UI benefits during periods of historically high unemployment is among the most cost-effective programs for reducing joblessness and stimulating the economy.  Earlier this week CBO reported: “Extending emergency unemployment benefits would raise gross domestic product (GDP) and employment in 2014 relative to what would occur under current law.  Recipients of the additional benefits would increase their spending on consumer goods and services. That increase in aggregate demand would encourage businesses to boost production and hire more workers than they otherwise would, particularly given the expected slack in the capital and labor markets.”

Text of the letter follows:

Dear Majority Leader Reid, Republican Leader McConnell, Chairman Baucus, and Ranking Member Hatch:

We are writing to urge the continuation of federal support for unemployment insurance, a critical component of our ongoing recovery and a lifeline to millions of Americans as they search for work in this challenging economy.  As it stands now, a few days after the holiday season ends, unemployment insurance will abruptly terminate, cutting off support for 1.3 million Americans.

Despite the tremendous uncertainty caused by the brinksmanship over funding the government and near-default, the economy has had 45 straight months of private sector job growth and created a total of 8.1 million jobs over that period.  However, we are still far from regaining the ground lost during the Great Recession.  The national unemployment rate has hovered around and over 7 percent and 10.9 million Americans are out of work and looking for a job.  Unemployed workers continue to face a daunting labor market, where for every one job opening, there are approximately 3 unemployed workers.  That’s why it’s imperative that we pass legislation that will get Americans back to work and that we don’t let unemployment insurance terminate at the end of the year. 

Federal support for unemployment insurance has been a major boon to millions of Americans that have been laid off through no fault of their own.  Since July 2008 unemployment insurance has provided over $255 billion in direct support.  Over that period of time, we have made significant reforms, like those that avert layoffs and help people find work faster.  Our constituents and the economy still need the support; the Economic Policy Institute estimates that the expiration of unemployment insurance will cost the economy 310,000 jobs and slow growth by 0.2 percent over the course of next year.

Continuation of unemployment insurance has traditionally passed on a bipartisan basis because of the tremendous support it provides to the unemployed, their families, and the economy.  We urge you to ensure that unemployment insurance is continued before its expiration at the end of the year.

 

Sincerely,

 

Tom Harkin (D-IA)

Jack Reed (D-RI)

Tim Kaine (D-VA)

Ed Markey (D-MA)

Kirsten Gillibrand (D-NY)

Jeanne Shaheen (D-NH)        

Sheldon Whitehouse (D-RI)

Robert Menendez (D-NJ)

Carl Levin (D-MI)

Barbara Boxer (D-CA)

Chris Coons (D-DE)

Mazie Hirono (D-HI)

Elizabeth Warren (D-MA)

Jeff Merkley (D-OR)

Bob Casey (D-PA)

Al Franken (D-MN)

Sherrod Brown (D-OH)

Ron Wyden (D-OR)

Jay Rockefeller (D-WV)

Brian Schatz (D-HI)

Patty Murray (D-WA)

Debbie Stabenow (D-MI)

Bernie Sanders (I-VT)

Dick Durbin (D-IL)

Richard Blumenthal (D-CT)

Amy Klobuchar (D-MN)

Patrick Leahy (D-VT)

Dianne Feinstein (D-CA)

Christopher Murphy (D-CT)

Tom Udall (D-NM)

Bill Nelson (D-FL)

Cory Booker (D-NJ)

 

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